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Apple Halts iPhone XR Supply Over Weak Demand

Recent reports claim Apple has halted supplier production for its ‘affordable’ iPhone XR, citing lower-than-expected demand.

According to the Nikkei Asian ReviewApple has instructed its top smartphone assemblers (Foxconn and Pegatron) to pause plans for additional production lines.

Sources reportedly claim Foxconn set-up 60 assembly lines for the iPhone XR, however, only used 45 lines. Now its primary customer has advised it does not require more.

The publication claims Foxconn will now produce ~100,000 less units per day, a notable 20% – 25% drop versus the former outlook.

Pegatron is reportedly facing a similar situation, awaiting further instruction from Apple.

Preparing for holiday demand, Apple had reportedly contracted a third smaller iPhone assembler to assist. Weaker-than-expected demand means the company will not receive iPhone XR orders this peak season.

Whilst iPhone XR demand has not met expectations, reports claim Apple has requested more iPhone 8 and iPhone 8 Plus models.

The Californian giant has reportedly upped its unit request for older iPhone models by 5 million.

The news corroborates industry trends, revealing a drop in flagship smartphone sales and low replacement demand. It comes as vendors such as Samsung and Huawei continue to amp up their mid-range portfolio.

Last week, shares in Apple slumped 7% following a weak holiday sales forecast. Coinciding with its Q3 results, Apple has announced it will no longer report unit sales of its main hardware division – e.g. iPhone, Mac and iPad.

 

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